Question 1

The natural rate of unemployment is

Accepted Answer

A) zero. 
B) the unemployment rate when there is no structural unemployment. 
C) the unemployment rate when there is no structural or cyclical unemployment. 
D) the unemployment rate that exists in long-run equilibrium, after adjustments to all changes have occurred. 
A) zero. 
B) the unemployment rate when there is no structural unemployment. 
C) the unemployment rate when there is no structural or cyclical unemployment. 
D) the unemployment rate that exists in long-run equilibrium, after adjustments to all changes have occurred.

Question 2

According to the policy irrelevance proposition

Accepted Answer

A) monetary policy can effectively reduce the rate of unemployment in the short run. 
B) workers are not rational in the long run. 
C) the Phillips curve slopes upward, not downward as traditionally assumed. 
D) expansionary monetary policy will only lead to a higher rate of inflation in the long run. 
A) monetary policy can effectively reduce the rate of unemployment in the short run. 
B) workers are not rational in the long run. 
C) the Phillips curve slopes upward, not downward as traditionally assumed. 
D) expansionary monetary policy will only lead to a higher rate of inflation in the long run.

Question 3

Critics of the Phillips curve argue that in the long run

Accepted Answer

A) there is a trade-off between unemployment and inflation. 
B) for any given unemployment level there is a corresponding inflation rate to which the economy will automatically revert. 
C) employees are not able to anticipate future rates of inflation, and therefore unemployment can always be reduced by inflating the economy. 
D) there is no trade-off between inflation and unemployment because workers' expectations adjust to any systematic attempts to reduce unemployment below the natural rate. 
A) there is a trade-off between unemployment and inflation. 
B) for any given unemployment level there is a corresponding inflation rate to which the economy will automatically revert. 
C) employees are not able to anticipate future rates of inflation, and therefore unemployment can always be reduced by inflating the economy. 
D) there is no trade-off between inflation and unemployment because workers' expectations adjust to any systematic attempts to reduce unemployment below the natural rate.

Question 4

Unemployment that deviates from the natural rate of unemployment is referred to as

Accepted Answer

A) frictional unemployment. 
B) cyclical unemployment. 
C) seasonal unemployment. 
D) structural unemployment. 
A) frictional unemployment. 
B) cyclical unemployment. 
C) seasonal unemployment. 
D) structural unemployment.

Question 5

The Phillips curve shows

Accepted Answer

A) the relationship between the rate of interest and planned investment. 
B) the relationship between the money supply and the price level. 
C) that an increase in government spending will decrease real national income. 
D) that an increase in inflation may be associated with a decrease in the rate of unemployment. 
A) the relationship between the rate of interest and planned investment. 
B) the relationship between the money supply and the price level. 
C) that an increase in government spending will decrease real national income. 
D) that an increase in inflation may be associated with a decrease in the rate of unemployment.

The natural rate of unemployment is

According to the policy irrelevance proposition

Critics of the Phillips curve argue that in the long run

Unemployment that deviates from the natural rate of unemployment is referred to as

The Phillips curve shows

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 16: Stabilization in an Integrated World Economy

The natural rate of unemployment is

According to the policy irrelevance proposition

Critics of the Phillips curve argue that in the long run

Unemployment that deviates from the natural rate of unemployment is referred to as

The Phillips curve shows

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters